Should I lease a Car or Finance one if I Just can't Buy it?

For those that are in the situation in which they need a new car, they have a string of options that they can choose from when it comes to getting the car of their dreams. However, many times the person cannot simply afford to buy this car flat out when they are at the lot. Which brings two options that the person can use, they can either lease of finance the car that they want. But, most people are caught in this kind of dilemma and wonder which option is the best option to choose? In order to answer this question, the person really needs to consider what the benefits and drawbacks of each of these types of financing are in order to determine the best fit for their situation.

Leasing

Leasing offers the unique ability to get the car that you want through paying payments directly to the manufacturer or car lot that you are dealing with. Many times these payments are much lower than what you would expect to pay with other financing options. The person will need to pay a percentage down on the car. However, the drawback is that when your lease period ends you do not own the car, though in most circumstances you are given amount for which you can purchase the car free and clear.

Another drawback of leases is that you are limited to a number of miles per the lease period. However, with this drawback does come the benefit of being able to have routine maintenance performed and usually included in the price that you are paying per month on the vehicle. You also need to keep full coverage insurance on the car during the time that you are leasing it.

Financing

Through financing the person is taking a car loan out with the car lot or their bank in order to pay for the car over time. This means that you are going to own the car eventually once you make all of your payments. The benefits of this is that you will own the car once you make all of your payments, and you can sometimes get the car without having to pay a down payment in many cases. However, with this option also comes the fact that the maintenance is up to you since it is your car. You are also not going to have to worry about how many miles that you put on the car since it is yours.

The drawback is that usually these payments are a bit more than what it would cost to lease a car, though the strict rules of leasing are not being used in the financing of the car.

So what should you do if you simply cannot buy the car? If you are one of those people that are not going to be driving much and like to have a different car every other year, then leasing may be the best bet for you since these lease agreements are usually one to two years long. However, for those that want to eventually own the car and do use their vehicle frequently, financing and paying payments on the car is probably going to be the best option for you. Overall, the person needs to weigh the pros and cons of each decision and choose based on what is best for them. One aspect that is going to affect them is their credit rating, which is going to determine if the person is eligible for either option when it comes to getting a new car.